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Oliver Kazunga Senior Business Reporter
THE lifting of the ban on raw chrome exports is expected to boost operations of the National Railways of Zimbabwe and small-scale miners while creating employment for many, a senior official has said.
Zimasco and ZimAlloys, the former powerhouses of chrome smelting, also stand to benefit immensely from the new regime.
The ban on raw chrome exports was effected in April 2011 when the government sought to encourage beneficiation of the mineral by local smelting companies.
Responding to questions in Parliament on Wednesday, Mines and Mining Development Deputy Minister Fred Moyo said the waiver of the ban would also ensure local smelting plants get the latest technology to improve competitiveness.
“We believe that by lifting the ban, we’ll activate our small-scale miners, allow employment to come up, allow ferrochrome companies to recapitalise and allow them to improve their facilities and hence, be able to compete with international producers,” said Moyo.
“We believe that we’re making the right decision. We’ll see more employment, activities on railways and we’ll also see efforts on recapitalising.”
He said the government took the decision to lift the ban on chrome exports, which was announced by Vice President Emmerson Mnangagwa at the weekend, after considering a variety of issues and aspects that affect the trading of chrome.
Moyo said the government observed external developments in the two biggest producers of chrome ore at country level, South Africa and Indonesia — who have continued to export chrome ore into India and China.
India and China are the biggest processors of chrome ore into ferroalloy.
“The Chinese and Indians have the most efficient plants to process chrome ore and we can’t compete with them. As a result, when these two other countries fill up the plants in China and India, the ferrochrome that comes out of there is much more competitive than our own product,” Moyo said.
“This has led to a lot of pressure on our own plants to compete or place their product on the international market.”
Chrome is an important resource used in industrial processes such as electroplating to give the metal properties such as abrasion and wear resistance and corrosion protection.
Moyo said India and China were more competitive because their plants were bigger while their labour and the cost of electricity and infrastructure charges were relatively cheaper than in the country.
He added that when local plants go under pressure they shut down.
“I think we’re all aware that out of the 12 old plants that we had, only about four are working effectively. The consequence of that is that all our small chrome ore producers have basically shut down,” said Moyo.
He said some operators shut down against the background of money that they had borrowed from banks while others had been forced to sell their product at prices as low as $40 per tonne against the international prices of around $80, $90 and $100 per tonne.
The Deputy Minister said it was a dilemma that local plants were shutting down due to competition and thus it was imperative to devise a solution to save the local chrome industry.
“We need to get our own plants to quickly get into a position where they get competitive technology. That’s what we’re driving at. As a country, we need to shift from producing high carbon ferrochrome which is selling around 90 cents per pound to go into low carbon ferrochrome that will sell at $1.40 per pound,” he said.
Zimbabwe has one billion tonnes of chrome ore and is the world’s second largest chrome ore reservoir after South Africa.
Bongani Ndlovu
Online Reporter